Nook reportedly set for buyout by Microsoft

Microsoft is reportedly looking to buy Nook Media, the digital book subsidiary of Barnes & Noble, in a $1 billion deal.

According to documents obtained by TechCrunch, Microsoft "would redeem preferred units in Nook Media", which would include the the e-book licenses, Nook e-readers, Nook tablets and a college book division.

Also revealed is that Nook plans to discontinue producing Android tablets by 2014, instead distributing its content through third party devices.

Nook e-book readers, however, do not have a planned discontinuation date but rather the company plans to phase them out in line with market demands and the natural shift to tablets being the main e-book reading device.

Microsoft already owns a 16.8% stake in Nook Media after the digital arm broke away from Barnes & Noble last October. Putting in $300million Microsoft used some of this leverage to ensure Nook was ready with content for the launch of Windows 8.

While $1 billion may seem like a reasonable chunk of money, the company was actually valued at $1.8billion as recently as January. As such Microsoft would be getting something of a bargain.

Microsoft and B&N representatives have declined to comment on this story.